Financial Option 3: $30 Million Investment in Bonds Rationale for investment: The business that's offering these bonds for sale contracts with another business in China to assemble computer components. The Chinese business is known to have used child labor in the past, but claims it has stopped this practice. However, the U.S. business selling these bonds has not investigated to verify whether these claims are true or not. Assumptions to consider: 10-year bond 8% coupon Priced at a discount: $95 Discount rate is 9% V11 EX fx . B D E F L M N O Q G H H K ACCOUNTING & FINANCIAL RATIOS om CURRENT RATIO (Current Assets / Current Liabilities) TOTAL ASSET TURNOVER RATIO (Total Revenue / Total Assets) Current Assets Total Revenue 32913000 300370001 21819000 203311000 Current Liabilities 1.095748577 Total Assets 0.107318345 WORKING CAPITAL (Current Assets - Current Liabilities) FINANCIAL LEVERAGE (Total Assets / Shareholder's Equity) Current Assets 32913000 30037000 2876000 Total Assets Shareholder's Equity 203311000 898640001 Current Liabilities 2.262429894 10 11 12 13 14 15 16 DEBT RATIO (Total Liabilities/Total Assets) NET PROFIT MARGIN (Net Income / Total Revenue) 17 Total Liabilities Net Income 30037000 203311000 1152000 21819000 Total Assets 0.147739178 Total Revenue 0.05279802 EARNINGS PER SHARE (Net Income / Weighted Average Common Shares Outstanding) RETURN ON ASSETS (Net Income / Total Assets) Net Income Shares Outstanding 1152000 18190001 Net Income Total Assets 1152000 2033110001 0.633315008 0.005666196 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 PRICE EARNINGS RATIO (Share Price (end of quarter / EPS) RETURN ON EQUITY (Net Income - Preferred Dividends / Shareholder's Equity) - Stock Price EPS NI - Pref. Div. - . Shareholder's Equity 1152000 89864000 1.69 0.012819371 Annual | PV | FV FV PV - Lump Sum FV - Lump Sum NPV RATIOS Monthly Accessibility Investigate + Ready Rate of Return Initial Investment Month 1 2 2 3 4. 8 9 10 11 12 Interest Investment Value $0 $ $0 $0 $0 SO $0 $0 $0 $0 $0 $0 $0 $0 SO $0 $O 1 2 3 4 8 9 10 11 12 Month Interest Investment Value $0 $0 $0 sol $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1 2 3 4 8 9 9 10 11 12 Month Interest Investment Value $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Time Value of Money - Monthly Compounding Year 1 5 6 7 $0 $0 $0 $0 $0 $0 SO $0 $0 Year 2 5 6 7 $0 $ $0 $0 $ $0 $0 $0 $0 $0 Year 3 5 6 7 $0 $0 $0 $0 $0 $0 $0 $ Year 4 5 6 7 $0 $0 $0 $0 $0 $0 $ $0 Year 5 5 6 7 $0 $0 $0 $0 Year 6 5 5 6 7 7 $0 $0 $0 $0 $0 $0 $0 Year 7 5 6 7 1 2 3 4 8 9 10 11 12 Month Interest Investment Value $0 $0 $0 $0 $ sol $0 $0 $0 $0 $0 $0 $0 $0 $0 $ $0 $0 $0 1 2 3 4 8 9 9 10 11 12 Month Interest Investment Value $0 $0 $0 $0 $ $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1 2 3 4 8 9 10 11 12 Month Interest Investment Value $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Month 1 2 3 4 8 9 10 11 12 RATIOS Monthly Annual PV FV | PV - Lump Sum FV - Lump Sum NPV + A B E M 1 1 2 7 8 9 2 Rate of Return 3 Initial Investment Year Interest Time Value of Money - Annual Compounding 3 4 5 6 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Investment Value $0 5 7 9 10 11 12 13 14 15 16 17 NON OPELOS 18 19 20 21 22 RATIOS Monthly Annual PV FV PV - Lump Sum FV - Lump Sum NPV + E F. D9 vix fx A B D Time Value of Money - Present Value Annuity 2 Number of Years 3 Rate of Return $0.00 4. Payment 12 3 4 5 6 78 9 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Annual PV FV PV - Lump Sum FV - Lump Sum NPV + RATIOS Monthly Accessibility: Investigate Ready Undo Chipboard Alignment Numbe E F G H N + NOO D10 1 X fx B D Time Value of Money - Future Value Annuity 2 Number of Years 3 Rate of Return $0.00 4 Payment 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Annual PV FV PV - Lump Sum FV - Lump Sum NPV + RATIOS Monthly Accessibility: Investigate Ready D9 EX fx A B D E F. 1 Time Value of Money - Present Value of Lump Sum 2 Rate 3 Years 4 Initial Investment + LOOOOOOOO 10 11 12 13 14 15 16 17 18 19 Annual PV FV PV - Lump Sum FV - Lump Sum NPV RATIOS Monthly Accessibility: Investigate + Ready H 1 A1 X v fx Time Value of Money - Future Value of Lump Sum A B D E F. G 1 Time Value of Money - Future Value of Lump Sum 2 Rate 3 Years $0.00 4 Initial Investment 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 RATIOS Monthly Annual PV | FV PV - Lump Sum FV - Lump Sum Ready Accessibility: Investigate NPV 21 22 Bonds NPV = $0 1 2 3 4 5 6 7 8 C Year Cash Flows $0 $0 $0 $0 $0 $0 $0 $0 23 24 Initial Investment 25 Annual Cash Inflows 26 Discount Rate 27 Number of Years 28 Principal Returned 29 30 31 RATIOS Monthly Ready Accessibility: Investigate Annual | PV | FV PV - Lump Sum FV - Lump Sum NPV +